Ready for second stage of investment quotasIlya Shestakov, head of Russia’s Federal Agency for Fisheries

Leading Russian fish producers have supported the recently announced state plans for the expansion of the existing programme of investment quotas, reports Eugene Gerden.

This federal programme is designed to generate conditions for the renewal of the Russian fishing fleet and contribute to the development of the country’s processing sector. As Federal Fisheries Agency director Ilya Shestakov told the Eastern Economic Forum, one of Russia’s most important annual business events, the first stage of the programme has already produced important results and ensured the renewal of 80% of the fishing fleet in the northern region and 40% in the Russian Far East region.

A second stage of the programme aims to pay particular attention to the development of fish processing capacity in Russia, while construction of new fishing vessels is expected to continue with at least 30 newbuilds, including large-capacity trawlers, to be built within the next few years.

In the crab sector – the most profitable area of the Russian fish industry – the state plans to extend quota auctions, despite protests from some producers who fear a possible consolidation in the market and crab quotas finding their way into the hands of a small number of the largest players.

“The mechanism has shown its effectiveness,” Ilya Shestakov said. “We have been able to start the construction of research capacity using the funds received as a result of auctions. As a rule, the funds generated from auctions are used within the industry as efficiently as possible.”

The Federal Fisheries Agency plans to distribute another 20% of quotas in the Far East for the construction of vessels, factories and industry infrastructure during 2022-2023. At the same time a further 50% of crab quotas and 100% of high-value resources will be distributed through auctions over the next two years.

According to Ilya Shestakov, successful implementation of these plans will enable an increase in processing in the Far East to as much as 80-90% of the overall catch, plus the construction of more than 80 new processing plants.

According to some sources in the Russian fishing industry, despite pressure from some leading fishing companies, the government has no plans to completely abandon the distribution of fish quotas on the basis of track records and  shift entirely to quota auctions, as this could alter the balance in the industry and result in many smaller operators being absorbed or squeezed out by large corporations.

As China remains closed to Russian companies, diversification of markets for Russian fish, primarily pollock, currently remains one of the priority targets for Russian fish producers. To address this, fishing companies working with the authorities are planning logistics infrastructure that will enable regular supplies of Russian seafood to western markets, particularly the EU.

The key to this is expected to be the northern sea route, and this will require some serious investments in ports at each end, notably in Murmansk, Kamchatka, Sakhalin and Vladivostok. During the Eastern Economic Forum, industry representatives called on the government to design a roadmap for the development of each of these ports.

In addition to western markets, the Forum was told that particular attention has to be paid to increasing Russian seafood exports to South-east Asia, South America and Africa. To this end, the establishment of a fish exchange mechanism is planned, while new legislation relating to organised trading of seafood products will ensure more efficient sales of Russian fish and seafood to overseas consumers.

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